Net Leased Best Buy Property


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Net Leased Best Buy Property

  2. 2. TABLE OF CONTENTS NET LEASED INVESTMENT OFFERING TABLE OF CONTENTS1) Confidentiality & Disclaimer2) Executive Summary3) Property Overview4) Assumable Financing Overview5) Aerial6) Maps7) Tenant Profile8) Demographic Comparison Report9) Location Overview10) Contact Information
  3. 3. CONFIDENTIALITY & DISCLAIMER NET LEASED INVESTMENT OFFERING CONFIDENTIALITY & DISCLAIMERThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to bereviewed only by the party receiving it from The Boulder Group and should not be made available to any other person orentity without the written consent of The Boulder Group. This Marketing Brochure has been prepared to provide summary,unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subjectproperty. The information contained herein is not a substitute for a thorough due diligence investigation. The BoulderGroup has not made any investigation, and makes no warranty or representation, with respect to the income or expensesfor the subject property, the future projected financial performance of the property, the size and square footage of theproperty and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliancewith State and Federal regulations, the physical condition of the improvements thereon, or the financial condition orbusiness prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. Theinformation contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, TheBoulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Groupconducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding theaccuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all ofthe information set forth herein.
  4. 4. EXECUTIVE SUMMARY NET LEASED INVESTMENT OFFERING EXECUTIVE SUMMARYThe Boulder Group is pleased to exclusively market for sale a single tenant net leased Best Buy property located Mankato,Minnesota. The 30,725 square foot Best Buy was built in 1993 and benefits from its location in the retail trade areaanchored by the River Hills Mall. Mankato is home to Minnesota State University – Mankato (14,000 students) and MayoHealth Care Systems (2,700 employees).The property is located at the traffic light controlled intersection of Adams Street and Highway 22. This intersection hashigh traffic counts of approximately 31,600 vehicles per day. Highway 22 is a primary north-south roadway connecting theretail trade area and provides over 200 feet of complete visibility along the east side of the subject property. Additionally,the property is located across from River Hills Mall, a regional mall anchored by Target, Sears, JC Penney and Herberger’s.Other major retailers less than one-half mile from the property include Wal-Mart Supercenter, Lowe’s, Sam’s Club, Kohl’s,Shopko and Hy-Vee.Best Buy’s original lease term was for 20 years with two 5-year renewal options and the lease expires in June 2020. BestBuy is a publicly traded company on the New York Stock Exchange (BBY), with a market capitalization of $8 Billion. BestBuy is an investment grade company with a Standard & Poor’s rating of BBB-.INVESTMENT HIGHLIGHTS• Investment grade company with an S&P Rating of BBB-• Rental increase of 3% in July 2015• Located in the primary retail trade area anchored by the River Hills Mall• No landlord responsibilities (NNN)• Nearby retailers include Wal-Mart Supercenter, Target, Sam’s Club and Lowe’s• Building size is within Best Buy’s new square footage parameters• Traffic counts exceed 31,000 vehicles per day• Positioned on a hard corner with 200 feet of frontage along Highway 22• Attractive assumable financing in place
  5. 5. PROPERTY OVERVIEW NET LEASED INVESTMENT OFFERING PROPERTY OVERVIEWPrice: $4,073,684Cap Rate: 9.50%Net Operating Income: $387,015 $398,627 – 7/1/2015 $410,586 – 7/1/2020 (Option 1) $422,903 – 7/1/2025 (Option 2)Renewal Options: Two 5-year optionsLease Commencement Date: July 1, 2000Lease Expiration Date: June 30, 2020Tenant: Best BuyCredit Rating: BBB-Year Built 1993Lease Type: NNNRentable Square Feet: 30,725 SFLand Acreage: 4.73 acresAssumable Debt: Loan must be assumedBest Buy Purchase Option*: December 2019 - $4,200,000 December 2024 - $4,000,000 December 2029 - $3,800,000 *Best Buy has the one time option to purchase the property at the designated price at the above dates
  6. 6. ASSUMABLE FINANCING OVERVIEW NET LEASED INVESTMENT OFFERING ASSUMABLE FINANCING OVERVIEW This property is subject to existing non-recourse financing that must be assumed with the following terms: Loan Balance (January 2012): $2,615,925 Maturity Date: June 15, 2020 Interest Rate: 6.50% Amortization: 10 year term with 15 year amortization Loan to Value: 64.2% Equity Investment: $1,457,926 Loan Balance at Maturity: $1,246,593 Cash on Cash Return: 6.94%Cash on Cash Analysis – January 2012 – June 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020*Net Operating Income $387,016 $387,016 $387,016 $392,822 $398,627 $398,627 $398,627 $398,627 $199,314Mortgage Payments $(292,692) $(292,692) $(292,692) $(292,692) $(292,692) $(292,692) $(292,692) $(292,692) $(146,346)Cash Flow $94,324 $94,324 $94,324 $100,130 $105,935 $105,935 $105,935 $105,935 $52,968Cash on Cash Return 6.47% 6.47% 6.47% 6.87% 7.27% 7.27% 7.27% 7.27% 3.63%*The amounts represent half of fiscal year 2020.
  9. 9. TENANT PROFILE NET LEASED INVESTMENT OFFERING TENANT PROFILEBest Buy Co., Inc. (NYSE: BBY) is engaged in the consumer electronics retail business. Best Buy has stores located in theUnited States as well as Mexico, Canada, China, Turkey, the United Kingdom. The companys subsidiaries include GeekSquad, CinemaNow, Magnolia Audio Video, Pacific Sales and, Future Shop. Together these subsidiaries operate more than1,150 stores in the United States, Puerto Rico, Canada, China, Mexico, and Turkey. In addition, the company has over 100Best Buy Express Automated Retail stores or “ZoomShops”, operated by Zoom Systems, in airports and malls around theU.S. In 2011 Best Buy was ranked 47 on the Fortune 500.Website: of Locations: 1,150Stock Symbol: BBY : NYSEStandard & Poor’s Rating: BBB-Market Capitalization: $8 Billion
  10. 10. DEMOGRAPHIC COMPARISON REPORT NET LEASED INVESTMENT OFFERING DEMOGRAPHIC COMPARISON REPORTPopulation 1-mile 3-mile 10-mileTotal Population 28,341 53,024 67,671Total Households 12,461 21,193 26,706Income 1-mile 3-mile 10-mileMedian Household Income $46,014 $50,618 $52,806Average Household Income $54,106 $60,202 $62,503
  11. 11. LOCATION OVERVIEW NET LEASED INVESTMENT OFFERING LOCATION OVERVIEWMankato is located in Blue Earth, Nicollet, and Le Sueur counties in Minnesota. The popula-tion at the 2010 census was 39,309, making it the fourth largest city in Minnesota outsideof the Minneapolis-St. Paul metropolitan area. Unemployment in Mankato is 5.7%, well belowthe national average. Mankato has a mixed employment base primarily in manufacturing,industrial and agriculture. Mankato also serves as a regional health care provider. MayoHealth Systems operates the hospital and medical care facility that provides an employmentbase of approximately 2,700 health care professionals and staff. The community is also thehome of Minnesota State University – Mankato (MSU-M). The University has a student popu-lation of approximately 14,000 students and an employment base of 1,400 educationalprofessionals and staff. The North Mankato Campus of South Central College is also locatedin Mankato and has 4,000 students.
  12. 12. CONTACT INFORMATION NET LEASED INVESTMENT OFFERING CONTACT INFORMATION 666 Dundee Road | Suite 1801 Northbrook, IL 60062Randy Blankstein Jimmy GoodmanPresident Partner847.562.0003